A bit of hope

The MOOCs are coming, the MOOCs are coming... batten the hatches and fire half the staff!

Well, maybe not. Or at least not yet.

Recall that, from the student's perspective, universities deliver a complicated mix of learnings, discipline, socialisation, enculturation, and perhaps the chance to find a suitable mate. It's not hard to see online education being able to provide some of the straight information-delivery part, but that's only part of the bundle offered by traditional institutions.

James Zuccollo at TVHE helpfully points to some recent work putting numbers on it. Universities compete for students on quality of its academic staff, quality of teaching, and a big pile of student amenities. And, students have heterogeneous preferences. They find:

• Students saying they value campus social life are attracted by more spending on student services but repelled by spending on academics; those who care about academics prefer universities that weight spending towards academics relative to student services. 
• Students planning on living at home while at university are less sensitive to university spending on consumption amenities than those living on their own.
• Spending on student services correlates with student evaluations of campus life and also improves student assessment of the academic environment; spending on instruction improves measures of the academic environment but not measures of subjective quality of life.

They conclude:

More generally, our results suggest that colleges compete for students on many dimensions –  price, distance, consumption amenities, academics  –  and that different students respond differently to these attributes because preferences are so heterogeneous. The importance of  market pressure  to the behavior of higher education institutions has not been thoroughly examined and the slim prior literature on the topic has focused exclusively on the role of academic quality and cost, ignoring other dimensions on which colleges compete. One important implication of our analysis is that for many institutions, demand-side market pressure may not compel investment in academic quality, but rather in  consumption  amenities. This is an important finding given that quality assurance is primarily provided by demand-side pressure: the fear of losing students is believed to compel colleges to provide high levels of academic quality. Our findings call this accountability mechanism into question. However, our findings do not speak to the normative issue of whether consumption amenities are good or bad for students and taxpayers.

James concluded:

As summarised by the Economic Logician, “except for the top students, high school graduates do not care about academics at all. All they want is excellent “college consumption amenities.” And this likely explains why they learn so little while in college. Their focus is on the university as a consumption good, not an investment good.” The policy-maker’s view of the value of university and the student’s view are very different.

What does this mean for policy, then? Well, if the private value of university is largely in the consumption value then the total value is far higher than most estimates suggest since they are usually based entirely on investment value. That has implications for the level of the subsidy we want to provide to tertiary students. In addition to the efficiency questions we also need to ask whether,as a society, we want to heavily subsidise most students on an extended holiday?

I conclude that MOOCs aren't likely to eat a substantial part of our academic lunch barring substantial changes in tertiary funding, or unless parents start balking at the large cost differential between online and on-campus options.

But I do worry about a model that could blend consumption amenities and lower cost structures: replacing a lot of standard university courses with MOOC equivalents, with local tutorial support. Core papers in a lot of disciplines follow an international standard curriculum. Were those moved to MOOCs with local tutorials, and locally based academics teaching the electives that have more local application, universities could move to a lower cost curve without as much harm to the other parts of the bundle.